Any class action from disgruntled mortgage borrowers under the NCCP has been deemed unlikely to succeed.
Earlier this week, Fairfax newspapers revealed a class action involving a potential 300,000 borrowers was being levelled at major banks, amid claims their lending practices had put customers at risk.
The class action, if mounted, would focus on first homebuyers and lower income households lured into the market by lower interest rates following the onset of the GFC and now struggling to repay.
Speaking with Australian BrokerNews, MFAA CEO Phil Naylor said while detail remains sketchy, it would be difficult to see such an action succeed under the newly implemented NCCP regime.
Naylor said the regime itself requires lenders and brokers to only lend or recommend products that are not unsuitable.
"I would be surprised if it could be established that either lenders or brokers involved in such a large number of loans would have not acted ‘responsibly’ as required under NCCP," he said.
The class action will allege that some of these borrowers are experiencing severe financial hardship through no fault of their own, through being allowed to enter a loan contract that they could not afford.
The case is being spearheaded by retired international insurance broker Roger Brown, according to Fairfax, who has been quoted as saying the way banks have been lending has been "irresponsible".